Tag Archives: arizona corporation commission

Pinnacle West reports

Pinnacle West Reports Positive 2011 Fourth-quarter & Full-year Results

 ’Disciplined cost management’ and strong operational performance benefit bottom line

Pinnacle West Capital Corporation reported consolidated on-going earnings of $12.1 million, or $0.11 per diluted share of common stock, for the quarter ended December 31, 2011. This result compares with on-going earnings of $5.2 million, or $0.05 per share, in the same 2010 period. The Company’s net income attributable to common shareholders for the 2011 fourth quarter was $12.6 million, or $0.11 per diluted share, compared with net income of $7.4 million, or $0.07 per share, for the same quarter a year ago.

For full-year 2011, Pinnacle West reported consolidated on-going earnings of $328.1 million, or $2.99 per share, as compared to $324.7 million, or $3.03 per share, a year ago. Consolidated net income attributable to common shareholders for 2011 was $339.5 million, or $3.09 per diluted share, compared with 2010 net income of $350.1 million, or $3.27 per diluted share.

On-going earnings exclude results of discontinued operations primarily related to the Company’s real estate activities and former energy services business. A reconciliation of reported earnings to on-going earnings is provided at the end of this release.

“Disciplined cost management, concentration on our core electricity business and superior operational performance by our dedicated employees – particularly in the areas of customer service, reliability and safety – produced sound financial results,” said Pinnacle West Chairman, President and Chief Executive Officer Don Brandt.

Brandt added that the Company’s 2011 results exceeded its earnings guidance. The Company had projected that on-going earnings would be near the top of its guidance range of $2.75 to $2.90 per share. The actual results were due, in part, to lower than expected operating and maintenance costs, and cooler than normal weather that increased retail sales in the fourth quarter by a similar amount as the year-ago period.

“We achieved a significant milestone with the proposed settlement of APS’s pending retail rate case,” said Brandt. “The agreement has broad support and contains provisions important to customers, shareholders and other stakeholders.” The settlement is pending approval by the Arizona Corporation Commission. APS and the other parties have requested the agreement take effect July 1, 2012.

Brandt cited additional examples of the Company’s recent achievements:

  • In 2011, APS continued its top-tier customer satisfaction rating, maintained superior power plant performance, and provided its 1.1 million customers with record levels of service reliability.
  • Standard & Poor’s Corporation (S&P) raised credit ratings in June for Pinnacle West and APS to BBB, up from BBB-, thus reducing borrowing costs and improving access to debt markets. S&P cited the companies’ stronger credit metrics, reduction in debt, improving regulatory environment and prudent financial management as contributing factors.
  • APS also celebrated several renewable energy milestones as the AZ Sun Program (APS-owned solar energy) added 50 megawatts of new solar capacity, enough to serve more than 12,000 APS customers. With these plants, APS’s renewable energy portfolio now includes 423 megawatts with an additional 523 megawatts in development. New solar and wind plants to serve APS customers have created more than 2,400 design, engineering and construction jobs for Arizona.

The fourth-quarter on-going results comparison was positively impacted by the following major factors:

  • A decrease in operations and maintenance expenses improved earnings by $0.06 per share, due largely to lower power plant maintenance costs as a result of more work being completed earlier in the year than in 2010; and to lower employee benefit costs, partially offset by higher customer service and energy delivery expenses. The variance excludes costs associated with renewable energy and energy efficiency programs, which are offset by comparable amounts of operating revenues.
  • Higher transmission revenues improved earnings by $0.03 per share, primarily because of a retail transmission rate increase implemented in July 2011.

These positive factors were partially offset by the absence of tax benefits of $0.06 per share that were recorded in the 2010 fourth quarter, but were related to prior years.

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APS, the Company’s principal subsidiary, recorded 2011 fourth-quarter net income attributable to common shareholder of $14.3 million versus net income of $7.8 million for the comparable 2010 quarter. For 2011 as a whole, APS net income attributable to common shareholder was $336.2 million compared with $335.7 million for 2010.

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Solar tariff

Debate Over Renewable Energy Tariff For Rebate Customers

Solar rebate customers may be faced with a higher renewable energy tariff that will supplement the solar rebate fund to help other customers install solar equipment.

Previous articles in the Green Scene section focused on the many available rebates for purchasing solar equipment for a home or business. These articles also focus on the savings that can be accrued after switching to a greener energy source. This post is a summation of the Dec. 20 Arizona Republic article and a personal commentary on the decisions to be made concerning a renewable energy tariff for rebate using customers.

The Renewable Energy Tariff

Before you switched to solar (or if you haven’t yet), you are charged with a renewable energy tariff. The tariff price is based on how much energy you use, so if you have installed solar energy equipment, you buy less energy from your utility company. Therefore, you reduce your monthly tariff. The APS renewable energy tariff is capped at $4 a month for residential customers that have not transitioned to solar energy. If you have a solar system on your home, you pay approximately half that, or less.

Arizona Corporation Commissioner, Brenda Burns, thinks it’s fair to charge those who used solar energy rebates a few extra dollars each month so that those who haven’t taken advantage of the solar rebates can have that same opportunity.

The reasoning behind this idea is that more people are going solar and fewer people are left paying the renewable energy tariff. So the Arizona Corporation Commission wants to ensure that there will be money in a fund to continue allocating rebates to customers that want to go solar.

It becomes an issue of fairness when people who are renting or those of lower income are paying the renewable energy tariff to its extent and supporting higher-income homeowners, living in affluent neighborhoods who want to use rebates to install solar in their homes, Burns says in the article. Burns also says that the implementation of the tariff will not be retroactive to those who have used rebates to install solar equipment in their homes, only those who utilize the rebates in the future.

I’m sure this has a lot of people asking, “Why should this come out of my pocket?”

Renewable Energy Tariff’s Effect On Solar Policy

Critics of this idea include solar companies and say that this is an attack on the industry. Arizona Corporation Commissioner, Paul Newman, wonders from where this idea stemmed in the first place and feels that it is a punishment for customers who were the first to make that transition to solar energy.

Different levels of rebates are available, but let’s say a customer utilizes a $4,000 rebate to install a solar system in their home. That person is already spending thousands of dollars to put this system on their roof; the rebate was a welcome relief and an incentive.

The political alignment with the move to go solar was constructed to make it easier to make the change, and by monetarily inviting homeowners to do so persuaded them. Now the policy with solar is still there, but it isn’t as motivating to homeowners.

I’m all for a greener future, and I love the idea of getting our power from the sun, but to entice homeowners with rebates and then make them pack back the rebates is comparable to false advertising.

In my mind, a rebate is a discount on a product that you don’t have to pay back. So, calling these solar rebates isn’t necessarily true. It’s like a loan that you borrow, but you pay it back interest free. And the next question is, how long? How long do clean-energy users continue paying the full rate of the renewable energy tax? Until they have paid back the amount of the rebate they used? Double the amount of the rebate they used?

Should solar rebate customers pay the renewable energy tariff so more customers can take advantage of solar energy? Should the idea of the rebate be eradicated completely and allow individuals to purchase their own solar equipment? Should the money just run out, with the utility companies instituted an early bird gets the worm policy when it concerns the solar rebates?

We’d like to know what you think, let us know in the comments.

 

Medical Marijuana Where Will The Dispensaries Go

Arizona’s Medical Marijuana Proposition Passes, But Where Will The Dispensaries Go?

Arizona voters made history again this month, narrowly approving Proposition 203, the ballot initiative allowing one medical marijuana dispensary for every 10 pharmacies in the state (which translates to about 120 statewide). Under Prop. 203, patients suffering from a wide range of painful medical conditions will be able to buy small amounts of marijuana from state-approved dispensaries with a doctor’s prescription. Those living more than 25 miles from an outlet will be allowed to grow their own.

Needless to say, residents, cities and landlords are facing some interesting dilemmas before the first outlets potentially open in March 2011 … in a neighborhood near you.

Under the approved Prop. 203, the Arizona Department of Health Services must issue licenses to the so-called “medical marijuana clinics,” but it’s the local municipalities that must adopt zoning restrictions that regulate the size and location of such clinics. Cities are expressly forbidden under Prop. 203 from prohibiting them outright.

So who will ultimately win the “Not In My Back Yard” tug-of-war? Cities such as Phoenix, Tucson and Mesa, are grappling with commercial landlords, their constituents and zoning restrictions to keep the centers away from schools, churches and residential areas.

On the commercial real estate front, with the marketplace hard hit by the recession and Phoenix retail vacancy rates at 13 percent, many landlords are looking to fill empty space. But tenants such as medical marijuana clinics would cause some considerable controversy with residential neighbors and fellow commercial tenants.

“There are some landlords that will definitely have an issue with it,” said Pete Bolton, executive vice president and managing director of the commercial real estate brokerage firm Grubb & Ellis in Phoenix.

He expects dispensary operators to seek retail center locations with public exposure and easy parking. But, he added that some commercial landlords are hesitant to sign a marijuana outlet, especially if they have other tenants that cater to families or conservative customers.

Prior to the ballot passing, a number of nonprofit groups already were eying Phoenix-area shopping centers as possible dispensary locations. Even before the election earlier this month, more than 14 medical marijuana groups had reserved business names with the Arizona Corporation Commission. Some others were incorporating and looking for investors, dispensary locations and even growing sites.

Marketing manager for Medical Marijuana Dispensaries of Arizona Inc., Allan Sobol, says that like any other business, location is key.

“I want to be at a high-exposure location. I envision them just being like a CVS or Walgreens,” Sobol said.

He expects most marijuana outlets will be located in strip malls and other high-traffic locations near hospitals and medical centers. But with the dispensaries intermingled with other more conservative businesses, there could be some concerns.

So landlords will have some choices to make, and for Arizona cities facing these same dilemmas, the clock is ticking. Mesa, like Phoenix, will likely vote on where to locate the dispensaries by the end of the year.

This is likely the first time in history that a Mesa mayor has ever joked about collecting sales taxes on bongs or marijuana paraphernalia. But then, it’s probably also the first time in history that Mesa has come face-to-face with the prospect of stores legally selling marijuana. Given its size, Mesa could land between eight and 10 of the 120 dispensaries.

“This is not something we can prohibit,” Mesa Mayor Scott Smith said during a city council study session last month.

Under its proposed zoning regulations, Mesa would limit the dispensaries from residential, industrial and employment areas. Also, they could not locate within 2,400 feet of other medicinal marijuana shops and drug/alcohol rehab facilities. They would have to stay 1,200 feet away from churches, parks, open spaces in homeowner associations and libraries. They could be no closer than 500 feet from schools or group homes for the handicapped.

Arizona Department of Health Services Director Will Humble says cities need to act fast.

“Cities can’t wait,” he said. “If they don’t get it done in time, I’ve got no choice but to approve a dispensary if they don’t have a zoning restriction in place.”

In other words, the state bureaucrats will act if the mayors and councils haven’t.

So, while a razor thin majority celebrates the approval of Prop. 203, mayors and city councils around the state not only must act fast, but also wrestle with moral, political and economic issues before the first medical marijuana clinic opens on a corner — possibly in your neighborhood.

California Leads the Way in Green Building

CALGREEN Leads The Way In Green Building

California has long been a leader in sustainability and now the state is taking it one step further. Officials from the the California Building Standards Commission recently adopted the country’s first mandatory statewide green building code. The regulations, called CALGREEN, will require every new building to reduce water usage by 20 percent and recycle 50 percent of its construction waste. Other stipulations include separate water meters for indoor and outdoor water use in commercial buildings and mandatory inspections of energy systems for nonresidential buildings over 10,000 square feet. These regulations take effect in January 1, 2011.

The objective of the code is to help the state achieve their goal of 33 percent renewable energy by 2020.

In Arizona, the Arizona Corporation Commission has goals for achieving 15 percent renewable energy by 2025. With the Renewable Energy Tax Incentive Program, along with many other initiatives we are making big steps toward making this a reality.

California is definitely ahead in their efforts to incorporate environmental standards on many levels. Other states, Arizona included, are sure to learn from the example that the Golden State sets.

For more information visit http://gov.ca.gov

Winery

Wineries Win Battle At Capital

Southeastern Arizona:
The Border Report

Significant business developments promise to fortify the economies of Arizona’s southern half

By Peter O’Dowd

After battle waged at the Capitol, local wineries still in the game. Poised to enter the State Legislature with a litigious flurry, Arizona wine growers dug in for a fight of David and Goliath proportions. When the dust settled and the vote was cast, the underdog had defeated a lobbying giant, leaving an unencumbered path for the future of the state’s wine industry.

border_reportThe history of Arizona wine law is tangled in a bevy of U.S. Supreme Court cases and litigation in states that were previously consumed with distributing regulations. In a nutshell, with the approval of Senate Bill 1276 last May, Arizona wineries reaffirmed the right to self-distribute to restaurants and retailers. Smaller wine growers also secured the privilege to bypass wholesalers and ship directly to consumers via telephone, mail and Internet sales, or set up satellite tasting rooms and retail outfits away from their remote locales. These steps, which wine growers say are essential to their survival, were not allowed under previous legislation.

“You have to understand how dominate the wholesale part of the liquor industry has been for years from a policy standpoint,” says Rod Keeling, president of the Arizona Wine Growers Association and owner of Keeling-Schaefer Vineyards in Pearce, Ariz. “They were in total disbelief that a bunch of guys with dirt under their fingernails could come up here and convince the legislature that they ought to do something for us instead of something for them. I’m still not sure they know what hit them.”

Keeling and his colleagues feared wholesalers would convince lawmakers to revert back to a three-tier system that mandated even small wine makers sell to wholesalers who would then distribute to retailers, and ultimately, consumers. Keeling says an 11th-hour compromise between the groups was preferable to the lawsuit his organization would have brought if boutique growers were forced under the three-tier system. “That would have been death,” he explains.
So, instead of a deathblow, Arizona vineyards are in a position to expand. Kent Callaghan, who has received international attention for his varietals crafted 30 miles from the Mexican border, says offsite retail presence gives growers more options to stay in business. “Certainly you’ll see an increase in quality and quantity,” says Callaghan, who claims improvements are already brewing. “Nobody associated Oregon or Washington as a wine growing area 30 years ago. It took a while for the state’s wine to catch on with its residents. The same thing is happening here where people have stopped immediately acting negatively toward Arizona wine.”

Keeling agrees, but doesn’t shy away from past shortcomings. Five years ago he could only stomach two Arizona labels. Now he drinks six or seven. “We’ve added a lot of quality producers,” he says. “They are smarter, more committed to quality, not using the tourism model; it’s not being sold as a novelty but on its own merits. Kent Callaghan deserves all the credit for that.”

For years, Keeling says the state was stuck at eight or nine wine growers, but in the last two years that number has swelled to 22. What used to be a state of 12 or 13 vineyards is now the home to 32. Perhaps most telling are the production numbers: 15,000 annual gallons four years ago compared to 47,000 gallons today.

Indeed, the gears may already be moving and some predict Willcox will become the state’s vineyard epicenter. Amid favorable water and weather conditions in Cochise County, experienced wine grower Dick Erath bought 200 acres close to town. As these seasoned experts employ Arizona’s nascent vineyards, the relatively small knowledge base grows, techniques improve and the industry blossoms.
Of course, favorable legislation doesn’t hurt either.

Nogales
Extra Lanes Slash 4-hour Border Wait
Nogales, Ariz.—Port Authority officials here anticipated a July completion of two additional commerce lanes linking Mexican and U.S. boundaries that would reduce agonizing wait times at the border. The $4.3 million expansion brings to four the number of lanes motorists and commercial trucks use to cross the border. Terry Shannon, chairman of the Greater Nogales-Santa Cruz County Port Authority, says the Mariposa Port of Entry can process 300 trailers effectively per day, but in reality 1,400 trailers line up daily on either side of the border. The glut creates an average wait of four hours. This is the first step in a larger plan to reconfigure the port. $9.8 million is secured in the 2007 presidential budget for a port with capacity for 3,000 trucks per day.

Tucson
SlimFast Site to Can Beans, Not Shakes

Tucson, Ariz.—The former SlimFast manufacturing building in Tucson has been vacant for nearly two years, but plans are under way to fill the 440,000-square-foot plant with food of a different fare. Arizona Canning Company LLC, of Mexico, announced in June the building would house its U.S. headquarters, bringing 200 employees to the region in the next three years. The majority of the recruits will be from the Tucson area. By summer 2007, Arizona Canning Company plans to buy raw material from U.S.-based suppliers, receive it in Tucson, process and sell the plant’s output to U.S. markets across the country. “This will be a huge win for Tucson,” notes Joe Snell, TREO President & CEO.

www.lacostena.com.mx

Bowie
Gasified Coal Emits a Fresh Breath

Bowie, Ariz.—Developers of the 600-megawatt Bowie Power Station announced the electric generation facility planned for Southeastern Arizona will now incorporate environmentally sensitive coal technology. The project will gasify coal before combustion for cost-effective generation while protecting the environment, creating local jobs and economic growth. Developers say the project will lessen Arizona’s dependence on natural gas for electric generation. “This is unlike a conventional coal plant where its pulverized and burned,” says spokesman Ian Caulkins. “In this case, mercury, sulfur and other contaminants are removed prior to combustion.” Bowie is expected to outperform the efficiency and emissions of existing coal power plants, which will make it one of the cleanest coal plants in the world. The Arizona Corporation Commission has already granted a certificate. All remaining regulatory requirements will be completed by 2007 and construction will then begin as soon as possible with commercial operation expected in 2012.

www.bowiepower.com

AZ Business MagazineSuperior
Broadband a Boon to Local Businesses

Superior, Ariz.—Until recently, sending large files over the Internet was an exercise in patience for business owners in Superior. But a gift from the Arizona Department of Commerce will funnel in $35,000, bringing high-speed broadband infrastructure and the potential for hundreds of new jobs.
Superior businesses were hindered with limited dial-up connections, which severely limited communications, ordering products online and carrying out tasks as simple as e-mailing digital photos. “Our business has suffered as a result of our inability to access reliable infrastructure,” says Rozlyn Lipsey, a Superior business owner. Several local businesses have provided $1,000 matches to fund the project. The town has dedicated $25,000 and applied for an additional $270,000 from the federal government to enhance the initiative. An award announcement will be made this fall. Officials expect the improved connectivity will allow business the chance to grow, facilitating 300 full-time jobs.

www.azcommerce.com

Arizona Business Magazine Aug/Sept 2006

AZ Business Magazine Aug-Sept 2006 | Previous: Metro Report | Next: Colorado…

Waveyard Development

Valley’s Already Booming Economy Prepares For An Ambitious Future

The Metro Report

The Valley’s already booming economy prepares for an ambitious future.

By Peter O’Dowd

Surf park to bring millions to one lucky city and the entire region

Somewhere below this vast valley of dust and desert landscapes, an oasis is about to spring forth—a $250 million outdoor park on the scale of Disneyland but with an aquatic propensity previously unseen in Arizona.

 

Metro ReportWaveyard Development, founded by a life-long surfer and a former wireless executive, is capitalizing on the increased number of adventure sports enthusiasts flocking to Greater Phoenix. The plan is ambitious: a technological flurry of wave pools and whitewater rafting, kayaking and scuba diving—150,000 square feet of water surface in all—merged with a 320-room resort hotel, a conference center, retail, residential and restaurants on 200 acres. By incorporating these varied amenities into the master plan, Waveyard aims to become the nation’s first live, work and play surfing and adventure sports community. Developers cringe at the thought of calling Waveyard a theme park.

Wendell Pickett, managing partner of Greey-Pickett Landscape Architects, is leading the integration of Waveyard’s recreation and residential components. “Homebuilders are looking for the next growth driver in order to keep their pipelines full,” Pickett says in a prepared statement. “In a market of rising interest rates and declining demand, they need to remain competitive and add value to their product. The opportunity to surf, raft, snorkel, kayak and still be home by dinner is unprecedented in an urban environment.”

Developers Richard Mladick and Jerry Hug are keeping a tight lid on exactly where the park will break ground in 2007, though Mladick says the interest from several cities in the Phoenix area was extreme. Even as the group publicly gave the green light for development in June, a new municipality had come forward asking for consideration. “The impact on the city will be significant,” says Mladick, who spent the better part of his life in the ocean. “The city where it will be located has called this a transformational project. It will help define who and what that city is and drive the future growth around that city.”

However gung-ho the developers may be about their project today, the Waveyard concept started humbly. The original idea centered around a retail, entertainment and lodging concept with the potential to later bring in headline amenities like the whitewater course. But all signs pointed toward expansion when developers sat down with corporate sponsors and investment partners.

“Numerous feasibility studies were run by three separate companies on the Phoenix market and every time the capacity analysis exceeded our planning and design intentions for the original park,” Mladick says. “That’s what drove some of the growth.”

Phoenix has always had a radically under-served recreational market, developers say, which further supports Waveyard’s ambitious scope. Rawhide, the faux Western town that recently relocated from its longtime perch in north Scottsdale, was the state’s No. 2 tourist attraction behind the Grand Canyon for years, and Arizona is the only major metropolitan market without a theme park. This has always been attributed to the engineering challenges associated with the extreme temperature swings. Mladick says Waveyard is the logical approach to conquering these challenges in Arizona.

By catering to the nearly 39 million enthusiasts who participated in outdoor sports last year, according to the Outdoor Industry Association, Waveyard’s first-year attendance is projected to exceed 1 million, keeping dollars in Arizona that would otherwise be spent in coastal cities and drawing new revenue into the state during the scorching summer months.

www.waveyard.com

Harquahala Switchyard
Power Line Proposal Would Link States

Harquahala Switchyard, Ariz.— A California power company wants to build a 230-mile high-voltage transmission line from Harquahala Switchyard outside of Phoenix to a substation near Palm Springs, Calif. Officials at the Southern Edison Co. say the project, called Devers-Palo Verde No. 2 because it runs parallel to an existing line, will lower the cost of electricity for California customers and increase tax revenues and employment figures in Arizona. During a two-year construction period, 150 people will work on the project and Arizona’s economy will receive $85 million. Before construction starts, however, multiple state and federal agencies must grant approval, including permission from the Arizona Corporation Commission, the Bureau of Land Management and the California Public Utilities Commission.

www.sce.com

Phoenix
Expansion to Feed Need for Lawyers

Phoenix, Ariz.—For a state of its size, Arizona produces fewer attorneys than many of its peers; but now the capital city and fifth largest metropolitan area in America will finally see its first private, urban law school. The Phoenix School of Law will relocate from Scottsdale this fall to a campus on the southeast corner of Indian School Road and Central Avenue, adjacent to Steele Indian School Park. The move will bring an anticipated 150 students, faculty and staff to the new location–a number that will increase to about 500 within the next three years. The school’s spokeswoman Jodi Weisberg says Arizona falls below the national average of lawyers per capita. The state has approximately two attorneys per 1,000 citizens compared to the U.S. standard of 3.7 per 1,000. This is the first law school in Arizona that offers part-time and evening classes.

www.phoenixlaw.org

Lichfield Park
Mayor Keeps Commuter Rail Dream Alive

Lichfield Park, Ariz.— It may not be as glamorous as the light rail project snaking through Metro Phoenix, but Lichfield Park Mayor Woody Thomas believes commuter rail could service the region within the decade. The Maricopa Association of Governments put $300,000 into next year’s budget to study the feasibility of commuter rail and the Arizona Department of Transportation allocated $400,000 to update their reports, says Thomas. Thomas says light rail issues often clash with commuter rail proposals based on the “scepter of money” and fears that a regional transportation system would compete for light rail customers. But advocates say the two are complementary. Questions remain, however: How much would commuter rail cost? Is freight rail—running at capacity—able to share track? One proposed route would run from downtown Phoenix to near the Palo Verde power plant in the West Valley with only a handful of stops. Thomas says the East Valley would have similar opportunities.

AZ Business MagazinePhoenix
Metro Job Growth Tips National Scales

Phoenix, Ariz.— With population surging in all corners of the state, Greater Phoenix has edged ahead of every metropolitan area in the nation in at least one growth category. According to the U.S. Bureau of Labor Statistics, 308 metropolitan areas reported over-the-year increases in non-farm payroll employment from April 2005 to April 2006. Of those cities, the Phoenix-Mesa-Scottsdale area topped the list with 97,800 new jobs. Next was the Dallas area, which trailed the Valley by nearly 17,000 jobs. Not surprisingly, Valley unemployment also improved. At 3.6 percent in April 2006, it fell 0.4 percent from the previous year. The Arizona Department of Commerce announced it would receive recognition from Area Development magazine for its involvement in the state’s employment growth. The magazine acknowledged Intel, Countrywide and Verizon projects that brought approximately 3,600 jobs to Chandler in 2005.

www.bls.gov

 

Arizona Business Magazine Aug/Sept 2006